National / International News
Republican presidential hopefuls are about to get their biggest test yet as they battle to make it onto the debate stage Thursday and woo voters who are just tuning into the contest.
Analysts expect car sales to set ten-year records this summer, part of a trend that is two or three years in the making. Lots of factors contribute, including low interest rates and a decent job market, but one in particular caught our eye: The rise of leasing.
It’s a piece of marketing genius.
As Edmunds.com analyst Jessica Caldwell explains it, "Leasing guarantees that someone’s going to need a new car in two or three years, when their lease expires."
The strategy goes back to the recession, when new car sales were in the toilet.
"As a result there weren’t a lot of used cars," Caldwell says. With supply depressed, used-car prices went up, and car companies realized they could make good money selling used cars— that is, cars with expired leases. Good enough money that they could charge less for the lease itself.
"Lease payments were really cheap, and all of a sudden, everyone started leasing," Caldwell says.
That was 2012. Today, more than a quarter of new cars are leased.
At Perillo BMW in Chicago, salesman Rick Tattoni confirms Caldwell’s analysis.
"That’s a fact," he says. By roping customers into a two- or three-year cycle, "You keep the wheel moving, and that’s why they thought of that."
For some years now, driving an electric car has been viewed by many as the ultimate badge of environmental consciousness. If you just look at the car, electric vehicles are about as clean as they come — no combustion engine, no emissions. But that doesn’t mean they don’t contribute to pollution.
Electric cars run on electricity, and the great majority of electricity is created at power plants. Depending on where you live, generating the electricity for your electric car may create more carbon emissions than a standard gasoline engine.
“It depends on where they're being driven,” Nick Muller says. Muller is a researcher at the National Bureau of Economic Research, where he co-wrote a working paper comparing emissions produced by gasoline cars versus those at power plants. The results produced a mixed bag for electric cars.
“They’re very good where the grid is clean," he says. "They seem to be not so good, in the terms that we track in this paper, where the grid is primarily reliant on coal.”
That means electric cars charged in states with a high percentage of renewables, like California, are greener than gasoline cars — while just the opposite holds true for large sections of the Midwest and Northeast that still rely heavily on electricity from fossil fuels.
Given this new analysis, some say the government should scrap its $7,500 tax incentive for electric cars.
“I don't think policy makers should be subsidizing or promoting electric vehicles at all,” says John DeCicco, a professor at the University of Michigan Energy Institute.
He says the high cost of electric cars, combined with limited range, make them a poor choice for most consumers, and therefore a bad strategy to reduce emissions.
“A more efficient gasoline vehicle, for the vast majority of consumers, is going to be the most economical way to be green, and policies should be consistent with that," DeCicco says.
But sales of electric cars have grown in recent years and don’t show any signs of slowing.
Robert Vogt owns a Tesla p-85D, a performance electric car. He says his decision to buy an electric car had nothing to do with environmentalism.
As far as carbon emissions, Vogt says, the power grid is getting cleaner all the time, and electric vehicles shouldn’t be blamed for outdated technology at the utility company.
“Well, I think it makes the point that we need some different energy sources," he says. "We can fix that end of it, we don't need to use coal.”
Meanwhile the range of electric cars is gradually improving, at the same time costs are coming down. Many new models run around $30,000, before the tax rebate.
The Athens stockmarket has reopened — having been shut for five weeks — and it has promptly plunged by more than 22 percent.
The selloff is hardly a surprise since bank shares make up 20 percent of the main Athens index, and they’ve been hammered in this crisis. But the sharp fall in share prices also reflects anxiety about the third bailout deal, agreed in principle by the government and its creditors last month.
Over the weekend, the ruling Syriza party postponed an internal vote on whether it should accept the deal. If it doesn’t, there could be another snap election and that could mean more uncertainty for investors around the world.
“Don’t underestimate the power of Greece to rock markets going forward,"says Kathleen Brooks, a currency analyst with Forex.com.
Click the media player above to hear more.
Older workers — those 65 and up — are staying in the workforce in higher percentages than previous recent generations that hit retirement age. Labor force participation of older workers is at a 25 year high. And for many, the reason is economic necessity.
A recent report by AARP finds that nearly half of Americans 50 and over have $25,000 or less saved for retirement. The Great Recession slashed many older workers' savings, retirement accounts (pensions and 401ks) and home equity. AARP reports that nearly half (44 percent) are now planning to work part-time after they reach retirement age, and one-third (33 percent) are delaying the age at which they expect retire.
Many older Americans have little choice in the matter and simply need to continue working as long as they can, if they can. The Economic Policy Institute, which researches labor-force trends, estimates that there are 57,000 men 70 to 74, and 69,000 women 75 and up, who are currently working but would not be in the workforce today if the recession hadn’t hit their savings and earnings so hard. EPI labor economist Elise Gould says that many wealthy households have fully rebounded from the recession as asset values (stocks and high-end homes) have surged back. But for the middle class, income and retirement savings still haven’t recovered.
"In fact, we have seen people losing their wealth," says Gould. "And that can lead to people staying in the workforce longer, because they simply cannot afford to retire.”
Economist Matthew Rutledge at the Boston College Center for Retirement Research says money that people were counting on in retirement won't go as far as people once supposed.
“Social Security benefits aren’t going to be replacing their income at the rates that they used to in previous generations,” Rutledge says. “People’s pensions aren’t as generous as they used to be. In all likelihood, people just haven’t saved all that much, housing values have fallen, as we saw during the recession.”
Rutledge and other economists have looked at the kinds of jobs people in their 60s and 70s tend to land. “It’s a lot of people working retail, people working as night watchmen and security guards — jobs that are stereotypically ‘old’," says Rutledge. "People are sort of shunted into jobs that don’t really pay as well, and may not have as secure a position.”
Kyle Pierce has some experience of this. She is 67, and retired from a career as a registered nurse at age 62. At the time she was making $42/hour. "I actually went back to work about three years ago — for money,” she says. She's been waitressing at a local coffee shop in her hometown of Monterey in Western Massachusetts. She says the retirement savings she and her husband had put away weren’t covering the bills. "I knew I was a really good waitress, way back," says Pierce. "I have a really good strong work ethic. In fact, some of the summer people that get hired just stand around and it drives me crazy.”
Vicki Bernstein doesn’t believe in standing around either. She’s 64 and teaches a full load of fitness classes to seniors at a medical clinic's health club in Portland, Oregon. Her husband, 63, works full-time as a shoemaker and coffee roaster. They also run a small business out of their home, selling prayer flags online.
"We always played more than we saved money," says Bernstein. "I think it was just something from my generation. I have been working for a long time, and it brings me a lot of satisfaction to see people age well. So I’ll probably do it till I die.”